Shoes of Prey takes on the US

How does a ‘fashion-tech’ success story from Down Under expand its reach in the United States?

Up-sticks and move there, says Shoes of Prey founder Jodie Fox, who’s done just that, six years after co-founding a business hailed as one of Australia’s most successful online fashion retailers.

Her site allows women to design their own footwear from a dizzying array of styles, colours, materials and sizes. Shoes are custom-made in China and shipped worldwide, in as little as two weeks.

After three years operating as a ‘pure play’, as enterprises whose presence is exclusively online are known, the firm dipped its well-shod toe in the traditional retail arena, by way of a concession outlet in David Jones’ Sydney city store in early 2013.

A similar deal with US department store Nordstrom inked in late 2014 was the catalyst for the move, which has seen Fox and her co-founders, former Google employees Michael Fox and Mike Knapp, relocate from Sydney to Santa Monica, California.

Photo from left to right: Michael Fox, Jodie fox and Mike Knapp

Dubbed Silicon Beach, the Los Angeles suburb is home to a host of high-tech and fashion-tech start ups.

The Nordstrom deal coincided with a $5.5 million cash injection from venture capital firm Khosla Ventures, which enabled Shoes of Prey to open a larger factory in the South China city of Dongguan and increase its headcount from 70 to 200.

Both milestones hammered home the fact that it was time for the company to spread its wings and give the world’s largest consumer market a go.

“We’re so proud to be Australian, and we want to take this idea further,” Fox says.

“We’ve always seen ourselves as having global reach, but I think you have to be on the ground to take advantage of the critical mass that’s available here in the US. Even though it took some time, I’m glad we waited as long as we did because it took a lot of cash and resources out of the company and it was reassuring to be doing it for two very solid reasons.”

Becoming immersed in the US

Despite the common language, becoming truly familiar with the US market can only be achieved via immersion, Fox believes.

“There are so many cultural differences; so many things that intellectually don’t make sense until you’re actually on the ground here, working and living,” she says. “For instance, I was in Seattle in November last year, and one of the first things I noticed was that the weather was so cold – I didn’t realise – and I thought, ‘guys, we have to do boots’.”

The value of being able to hold face-to-face meetings with strategic partners, such as Nordstrom, is difficult to overestimate, according to Fox.

“Knowing that we can sit down with them at the drop of a hat – and that we can have the same experiences as our customers day-to-day – helps us to make our offering better,” she says.

Going native successfully has entailed a steep learning curve and lots of work behind-the-scenes, with the company having to come to grips with the American tax and reporting regimes and support its Australian staff through the immigration process.

“We’re still figuring some things out – making sure everything is comfortable,” Fox says. “The background things have taken the most bandwidth, and it’s been challenging to make sure that they’re done correctly in coming over here.”

Twenty-two staff from Shoes of Prey’s Sydney office followed its founders across the Pacific; an extraordinary affirmation of its vision – and a boon as the business beds down in its new location.

“We gave them the option, whether they wanted to come or not and the majority chose to do so,” Fox says. “That was really beyond our expectations, and it gave us further confidence – that they wanted to come on this adventure with us.”

Top tips for moving offshore

Pondering the possibility of relocating your Australian enterprise offshore? Jodie Fox shares some tips for a smooth move.

Been making payroll on a wing and a prayer or staving off creditors while you wait for a remittance to hit your account? International moves call for deep pockets, so if you’re testing the limits of your overdraft regularly, it’s probably not a good time to pack up shop.

You’re not in Kansas anymore – or maybe you are, and you need to know how things are done there. Finding professional advisers who are across the way business operates in your home country and your new base will ensure your operations are compliant in both jurisdictions.

Location, location, location; it’s the mantra for real estate agents around the globe and just as important for Australian ventures looking for a new home. Do your homework and aim to settle in a city with a vibrant start up scene where other businesses in your industry are thriving.

Relocating internationally involves more than a weekend’s work. If you’re bringing staff along for the ride, recognise that they’ll need time out to sort the logistics of their personal moves.

About the Author

Business View Connect is NAB’s online source of economic updates, business trends and case studies specifically for small to medium enterprises. We draw on insights from NAB’s economists and a range of Australian business experts so you’re armed with the tips you need to help your business succeed. Regular topics include cash flow, business planning and wealth management.

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